LOCKDOWN LEVEL 2 [DAY 1]  

TOTAL DAYS 145 – 07 HOURS 38 MINUTES

By the close of trade on Monday, the South African rand weakened against the US dollar.

  • The dollar teetered near milestone lows on Tuesday, after a triple blow of retreating yields, soft U.S. economic data and a dip in safe-haven demand exerted broad selling pressure. Against the euro, Aussie, pound, Swiss franc and yuan it is poised to re-test multi month or multi year troughs made earlier in the month, though moves in morning trade were small as Wednesday’s release of the Federal Reserve minutes looms on the horizon.
  • On the data front, the US housing market index jumped to the highest level in its 35-year history of the monthly series and matched the record set in December 1998.
  • Tokyo stocks slipped Tuesday morning as additional U.S. action against Huawei Technologies Co. raised worries about an escalation in U.S.-China tensions and a stronger yen dented some exporters.
  • Nigeria’s foreign-currency shortage is squeezing the life out of Africa’s biggest economy. Banks won’t honor card payments, foreign investors can’t get their money out and manufacturers are unable to import vital raw materials as output hurtles toward a second contraction in four years. Dependent on oil exports for half of its revenue, the Nigerian government’s coffers have emptied after crude prices plunged in the wake of the coronavirus pandemic.
  • The yield on benchmark government bonds gained yesterday. The yield on 2026 bond rose to 7.44%. Further, the yield on 2023 bond advanced to 4.50% while that for the longer-dated 2030 issue rose to 9.26%.

In early trade on Tuesday, the US dollar is trading marginally higher against the South African rand at R17.5225, while the euro is trading 0.2% higher at R20.8315.  The British pound has gained 0.2% against the South African rand to trade at R23.0002.

By the close of trade on Monday, the euro advanced against most of the major currencies.

  • Finance ministers from the Group of Seven rich countries on Monday noted improved economic conditions in their economies, but underscored their concerns about the debt problems facing low-income countries. During a teleconference hosted by U.S. Treasury Secretary Steven Mnuchin, the ministers repeated their call for all official bilateral creditors to fully implement the G20 debt freeze for the poorest countries, and agreed to consider additional options, including extending the initiative into 2021.
  • The coronavirus pandemic caused a historic decline in economic output in Germany, writes the Bundesbank in its most recent Monthly Report. After seasonal and calendar adjustment, gross domestic product (GDP) fell by 10.1% quarter-on-quarter in the second quarter of 2020, according to the Federal Statistical Office.

In early trade on Tuesday, the euro has advanced 0.2% against the US dollar to trade at $1.189, while it has marginally weakened against the British pound to trade at GBP0.9056

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